The Sensex closed at 16,692 as it gained 91 points from the previous day’s close, while the Nifty closed at 4,986, up 33 points on the back of strong global markets.

Reliance Industries Ltd (RIL) said today that it had made a gas discovery in one of its exploration blocks in the Krishna-Godavari basin off the country's eastern coast. RIL holds a 90% interest in the block, which covers an area of 3,288 sq km, and Hardy Exploration and Production (India) holds the rest. The stock remained flat.

Mahindra & Mahindra Financial Services jumped 2%, after the company said that Franklin Templeton Mutual Fund had hiked its stake in the company.

Sun TV Network rose 1%, after the company said that it will restructure its distribution business.

Golden Tobacco remained flat after the company’s board approved developing its property at Vile Parle, a Mumbai suburb.

Valiant Communications Ltd has formed a 100% wholly-owned subsidiary, Valiant Communications FZE, in the United Arab Emirates, to promote, market and provide pre- and post-sales support to customers of Valiant at the international level. The stock shot up 4%.

Aban Offshore Ltd’s wholly-owned subsidiary, Sinvest AS, has redeemed bonds having a principal amount aggregating to Norwegian kroner 1 billion (equivalent to Rs800 crore) along with accrued interest, on the due date of 22 December 2009. The stock was up 4%.

As per reports, corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in the corporate sector in the third quarter (October-December) of the current fiscal, pointing to a firm broad-based economic recovery. Corporate advance tax payments for the quarter were up 44% to Rs48,300 crore against a 3.7% decline in the April-June quarter and a 14.7% increase in the July-September quarter.

During the day, the deputy head of the planning commission Montek Singh Ahluwalia said that the sharp surge in food prices reflects the impact of the drought and inefficient distribution, which could not be addressed by monetary policy. He said that while the increase in food prices was to some extent expected, it remained a concern. Food prices rose an annual 20% in early December—but they should decline in January 2010 as the stock situation is relatively stable. He further added that problems such as this cannot be tackled by blunt instruments like monetary policy.

“Price increase at the retail level is much more than the increase at the wholesale level which is because of dysfunctionality in the distribution system and the ministry is looking into it. But whenever required, we should import,” Mr Singh said.

Finance secretary Ashok Chawla announced that the government is likely to offer cash instead of bonds to State-run oil firms for compensating them for selling fuel at lower than market prices, as per media reports. However, no decision has been taken on the compensation amount.

During the day, Asia’s key benchmark indices in Hong Kong, Indonesia, Japan, South Korea, Singapore and Taiwan rose by between 0.69%-1.91%. But China’s index fell 2.32% on concerns that more initial public offering subscriptions by the year-end could impact market liquidity.

On Monday, 21 December 2009, the Dow Jones Industrial Average was up 85 points while the S&P 500 and the Nasdaq Composite were up 12 points and 26 points respectively after a Bill to overhaul the US healthcare system, which is perceived as less damaging to industry profits than expected, passed a crucial test in the US Senate.

Meanwhile, rating agency Moody’s cut Greece’s debt to ‘A2’ from ‘A1’ over soaring deficits, becoming the third major rating agency to downgrade the highly-indebted country’s rating this month. Moody’s has kept Greece on a negative outlook. Its rating is still two notches above that of Fitch and S&P, which earlier this month cut their rating on the indebted country to ‘BBB+’, the euro area’s lowest level.

The UK economy shrank less than previously estimated in the third quarter as a jump in construction and fixed investments brought the longest recession on record closer to its end. According to the Office for National Statistics, UK’s gross domestic product (GDP) fell 0.2% from the second quarter, compared with a previous measurement of a 0.3% drop. The recession has now shaved 6% off GDP, the statistics office said.

The Confederation of British Industry raised its 2010 economic growth forecast and said that the Bank of England may pause its bond-purchase plan in February 2010. Meanwhile, policy-makers have pledged to print £200 billion of new money to stoke spending and shake off Britain’s longest recession on record.

In premarket trading, the Dow was trading 43 points higher.